Company Name: Pacific Telesis Group
Public Availability Date: 02-02-1989
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER 1]
PACIFIC TELESIS GROUP
PACIFIC TELESIS CENTER, 130 KEARNEY ST., ROOM 2907
SAN FRANCISCO, CAL. 94108 December 14, 1988
CERTIFIED MAIL
RETURN RECEIPT REQUESTED Securities Exchange Act of 1934
Section 14(a)
Rule 14a-8(c)(7) Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: Pacific Telesis Group
Shareowner Proposals for 1989 Annual Meeting - Bryant Ladies and Gentlemen:
This statement and the accompanying materials are submitted by Pacific Telesis
Group (the "Corporation") pursuant to Rule 14a-8(d) under the Securities
Exchange Act of 1934 (the "Act") as a statement of reasons why a proposal
submitted by Mr. Cliff Bryant, a shareowner of the Corporation, may properly be
omitted from the proxy statement and form of proxy (collectively the "Proxy
Materials") for the Corporation's 1989 annual meeting of shareowners. The
proposal and its supporting statement (collectively the "Proposal") are attached
hereto as "Exhibit A". The Corporation plans to mail definitive proxy materials to its stockholders on
or about March 15, 1989. Pursuant to Rule 14a-6, the Corporation is not required
to file a preliminary proxy statement for its 1989 annual meeting of
shareowners. Proposal Mr. Cliff Bryant sets forth his proposal as follows:
"Resolved: That Pacific Telesis in joint discussions with it's labor partners, study the
impact to communities of the closing or consolidation of Pacific Telesis
facilities and be it further resolved that alternatives be developed that help
mitigate those corporate decisions sic such as, but not limited to:
o Locating new facilities where feasible within commutable range of old outdated
offices. o Remodeling or rebuilding older offices into new more efficient work
environments. o Reducing contract labor in those communities where office closures occur and
make provisions for Pacific Telesis employees to perform such work.
o Study other alternatives developed by officers of the company, there sic
staff's sic, and other business partners. Whereas this policy would seek to eliminate the burden of laid-off workers being
placed on the community and encouraging corporate responsibility for the future
of its work force." Rule 14a-8(c)(7)
It is my opinion as counsel for the Corporation that this proposal may properly
be omitted from the Corporation's proxy statement and form of proxy for its 1989
Annual Meeting on the basis of Rule 14a-8(c)(7) under the Act. Rule 14a-8(c)(7)
provides that a registrant may omit a proposal and any statement in support
thereof from its proxy statement and form of proxy "if the proposal deals with a
matter relating to the conduct of the ordinary business operations of the
registrant." The foregoing proposal relates to the closing of Corporation
facilities, and the Division of Corporation Finance of the Securities and
Exchange Commission (the "Division") has consistently allowed for the omission
of share owner proposals dealing with the closing of company facilities under
Rule 14a-8(c)(7). See, General Electric Company, available January 29, 1988
(attached hereto as Exhibit "B"). Such proposals have been excludable even where
they go beyond a mere request that the Board of Directors reconsider or reverse
the decision to close a particular facility, and also where the proposal seeks a
report or a policy statement from the Board in connection with the closing of a
facility. The fact that the Proposal requests a community impact study and a study of
alternatives to the closing or consolidation of the Corporation's facilities
does not carry this proposal outside the rationale for exclusion under Rule
14a-8(c)(7). In Exchange Act Release No. 34-20091, 48 Fed.Reg. 38218, 38221
(1983), pursuant to which amendments were made to Rule 14a-8, the Securities and
Exchange Commission (the "Commission") noted that its staff had taken the
interpretative position in the past "that proposals requesting issuers to
prepare reports on specific aspects of their business or to form special
committees to study a segment of their business would not be excludable under
Rule 14a-8(c)(7)." In response, the Commission adopted a significant change in
such interpretation of Rule 14a-8(c)(7): "Because this interpretation raises form over substance and renders the
provisions of paragraph (c)(7) largely a nullity, the Commission has determined
to adopt the interpretative change set forth in the Proposing Release.
Henceforth, the staff will consider whether the subject matter of the special
report or the committee involves a matter of ordinary business; where it does,
the proposal will be excludable under Rule 14a-8(c)(7)."
Because the subject matter of the Proposal, the closing or consolidation of
Corporation facilities, squarely addresses matters within the discretion and
determination of the Board of Directors, it cannot escape exclusion under Rule
14a-8(c)(7) by requesting a special study or report. Based upon the foregoing, and upon numerous "no action" letters cited by General
Electric Company's counsel in Exhibit B appended hereto, it appears that Mr.
Bryant's proposal may properly be omitted from the Corporation's proxy materials
pursuant to Rule 14a-8(c)(7). Conclusion
As required by Rule 14a-8(d), a copy of this letter is being sent to Mr. Bryant
with a letter notifying him of the Corporation's intention not to include the
Proposal in the Proxy Materials. A copy of such letter is attached hereto as
"Exhibit C". The ordering of printing supplies and other arrangements in connection with the
preparation of the Proxy Materials are already under way. Therefore, we would
appreciate your response to our position that the Proposal may properly be
omitted from the Proxy Materials no later than January 11, 1989.
Enclosed herewith are five copies of this letter, together with six copies of
the attachments, as required by Rule 14a-8(d). I also have enclosed an
additional copy of this letter, without attachments, and a self-addressed
stamped envelope. Please return the additional copy to me stamped "received."
If you have any questions regarding the foregoing, please contact me at the
number set forth above, or Elizabeth K. Roemer, Esq. on (415) 394-3533, collect.
Sincerely, Duane G. Henry
Senior Counsel Enclosures
[INQUIRY LETTER 2]
CLIFF BRYANT
17275 STARDUSTER DR.
NEVADA CITY, CA. 95959
Gentlemen, Enclosed is a resolution I wish to submit for an agenda item at the incoming
Pacific Telesis annual stockholders meeting. Either myself or my authorized representative will be in attendance at the
meeting. I will be prepared to discuss this resolution at length and wish to be
put on the published agenda. This resolution is important to the corporation for the following reasons:
o It increases the stock value of Pacific Telesis
o It will lead to enhanced relations with all employees
o It puts Pacific Telesis on the leading edge of corporate commitments to
employment security o It has little or no financial impact on the corporation. In fact it has the
potential of cost savings to the corporation I am in compliance with S.E.C. rules and regulations for submitting resolutions
by virtue of stock ownership exceeding the minimum amount required my I.O. # is
385-44-6699 and my stock plan # is PT/F9/02/385446699/3P422
If you have comments or question on this resolution I may be reached at;
CLIFF BRYANT
17275 STARDUSTER DR.
NEVADA CITY, CA. 95959 HOME-916-432-311
WORK-916-823-94 Sincerely, Cliff Bryant
EXHIBIT A Resolved:
That Pacific Telesis in joint discussions with it's labor partners, study the
impact to communities of the closing or consolidation of Pacific Telesis
facilities and be it further resolved that alternatives be developed that help
mitigate those corporate decisions such as, but not limited to:
* Locating new facilities where feasible within commutable range of old outdated
offices. * Remodeling or rebuilding older offices into new more efficient work
environments. * Reducing contract labor in those communities where office closures occur and
make provisions for Pacific Telesis employees to perform such work.
* Study other alternatives developed by officers of the company, there staff's,
and other business partners. Whereas this policy would seek to eliminate the burden of laid-off workers being
placed on the community and encouraging corporate responsibility for the future
of it's work force.
[STAFF REPLY LETTER]
February 2, 1989 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Pacific Telesis Group (the "Company")
Incoming letter dated December 14, 1988 The Company's letter relates to a proposal that the Company study the impact on
communities of the closing or consolidation of Company facilities.
In the past, the staff has permitted registrants to omit from their proxy
materials shareholder proposals dealing with plant closings. Those cases
involved either proposals dealing with specific decisions regarding the closing
or relocation of particular plant facilities, or proposals raising questions as
to how companies intended to deal generally with the broad social and economic
impact of plant closings or relocations, or both. In all such cases, the staff
concurred in registrants' arguments that proposals could be omitted in reliance
upon Rule 14a-8(c)(7). That provision permits the exclusion of proposals that
deal with matters relating to the conduct of a registrant's ordinary business
operations. In light of recent developments, including heightened state and federal interest
in the social and economic implications of plant closing and relocation
decisions, the staff has reconsidered its position with respect to the
applicability of Rule 14a-8(c)(7) to proposals dealing generally with the broad
social and economic impact of plant closings or relocations. It is the
Division's view that such proposals, including the one that is the subject of
the Company's letter, involve substantial corporate policy considerations that
go beyond the conduct of the Company's ordinary business operations.
Accordingly, we do not believe that the Company may rely on Rule 14a-8(c)(7) as
a basis for omitting the proposal from its proxy material. The staff's revised position, however, would not apply to proposals concerning
specific decisions regarding the closing or relocation of particular plant
facilities. Our position with respect to those proposals remains unchanged and
such proposals would continue to be excludable pursuant to Rule 14a-8(c)(7). In
addition, it is the staff's view that Rule 14a-8(c)(7) also would be available
to exclude a proposal that refers to the closing or relocation of a particular
facility; even if such proposal deals generally with the broad social and
economic of plant closings and relocations. Sincerely,
Cecilia D. Blye
Special Counsel
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